Demand For Land Has Slackened In Formerly “Hot” Markets
The Review Journal reports from Nevada. “If the Bureau of Land Management public land auction is any indication, Las Vegas has turned into a buyer’s market as demand for land has slackened and sales have slowed. In one of the smallest auctions since the Southern Nevada Public Land Management Act was passed in 1998, only four parcels totaling 25 acres were sold at Wednesday’s BLM auction for nearly $12.5 million, or roughly $500,000 an acre.”
“Fewer than 100 people attended the auction, which was held at the BLM’s Las Vegas field office. Past auctions have packed up to 2,000 people into venues.”
“‘We didn’t have long lines in registration,’ said BLM realty specialist Anna Wharton. ‘We cut back knowing there’s sluggish sales in the valley. If anyone here is interested in nominating a parcel, please do so.’”
In Business Las Vegas. “In September the BLM said it would allow the market to drive decisions on releasing land, and that it would not sell land when the real estate market is soft. The BLM canceled an auction for 2,200 acres in Henderson in December when developers were dropping their construction plans because of the soft market.”
“Without making more land available, Southern Nevada will become more like Southern California with its soaring prices because of limited land, said Las Vegas housing analyst Dennis Smith. Builders are having difficultly finding parcels of between 10 to 20 acres, and property owners aren’t cutting their prices, he said.”
“‘If you don’t have any more federal land, how do you expect prices to stabilize?’ Smith said. ‘We have been talking about this for 10 years, and eventually there is going to be a serious problem with land supply.’”
“A study by real estate consultant RGR Group of Las Vegas showed nearly 36,000 acres of federal and private land available for residential development.”
The Las Vegas Business Press. “Boyd Gaming Corp. has eliminated tentative plans for 1,000 condominium units at its $4 billion Echelon Place development, according to county planning permits.”
“‘Few projects are likely to commence construction in the next 12 months,’ said Brian Gordon, principal of a local business advisory firm. ‘Sources of market demand in 2007 will be much different than reported two years ago.’”
“Roughly 10,944 units had been canceled in the fourth quarter, and another 1,679 were suspended.”
From CNN Money. “D.R. Horton, like its rivals, has cut the number of new homes it starts to build, but a large supply of existing homes is also forcing homebuilders to reduce prices or offer incentives.”
“For example, in Las Vegas, formerly a ‘hot’ market, there are 2,500 unsold new homes, CEO Don Tomnitz said. But Las Vegas has 25,000 unsold existing homes, many of them unoccupied.”
The Arizona Republic. “The Arizona State Land Department still has no registered bidders for next Thursday’s planned auction of nearly two square miles of state trust land recently annexed into Fountain Hills.”
“The state has re-estimated the worth of the 1,276 acres at $95 million, officials said. The land was previously estimated at $130 million for an auction that was canceled in September because of low interest. A stagnant Valley housing market has led to an abundance of homes for sale and less interest in developing new housing tracts.”
“At least one major developer in the Fountain Hills market will pass on next week’s auction. Shelley Johnson, a spokeswoman for MCO Properties in Fountain Hills, said her company does not intend to participate.”
“Jamie Hogue, a deputy land commissioner for the Land Department, said 3,000 information packets about the Fountain Hills land were sent to prospective bidders. ‘I don’t have information on specific developers that I think will show up,’ Hogue said. ‘If there weren’t any bidders, we would have to review the entire process and consider what the options are for the future.’”
“New luxury condominiums are breaking price barriers, but the market slipped last month for Scottsdale resale condos.”
“The median price of Scottsdale condos dropped 10 percent in February 2007 to $254,950, and sales were off 6 percent from February 2006, according to a report Thursday from Realty Studies at Arizona State University.”
The Yuma Sun from Arizona. “Eastern Yuma County has been described as a blank canvas. Some projects are just being thought about, others are moving through various stages of the regulatory process. ‘There’s a lot of big things planned out there,’ said Anne Eichberger, long-range planning manager for Yuma County. ‘The question is what gets built.’”
“Since 2000, 274 housing units have been constructed in the Dome Valley/Wellton planning area. In the same time frame, zoning changes were approved that could allow for the construction of up to 317 more housing units.”
“Amendments to the Comprehensive Plan have been approved that would enable rezoning for up to 1,298 additional housing units. These numbers don’t include housing activity inside the town of Wellton, where Coyote Wash is located. When built out, Coyote Wash will include 2,500 residential lots (and) 140 condominiums.”
“Realtor Barry Julian focuses on eastern Yuma County ‘and has been extremely busy in the last couple of years. Thousands of acres have changed hands. Some pieces of ground have rolled over three times in the same year. It’s the only place to go for growth.’”
“He said he’s getting a lot of phone calls from energy companies from around the country. Others drive through the area, see the many for sale signs and wonder what is happening, he said.”
‘January’s rate of unemployment was 4.5 percent, an increase from December’s 4.4 percent. The state’s largest cities were hit hardest with unemployment at 4.7 percent in Las Vegas and 5 percent in Reno-Sparks. Those numbers exceeded the national average of 4.6 percent.’
‘Statewide, 21,500 jobs were lost in the month of January. Governments, including schools and universities, lost 6,300 jobs while 4,400 jobs were lost in construction and 5,400 jobs were lost in retail. ‘Job seekers should not be discouraged,’ said Terry Johnson, DETR director.’
‘Southern Nevada saw just 1,407 homes sales in February, a 21.3 drop from the previous year, reports the Greater Las Vegas Association of Realtors. And while there were only 5,210 new listings in February, slightly less than 12 months ago, there were still 19,639 units available for sale or 11.1 percent more than in 2006.’
‘Condo/townhomes saw similar results with only 277 sales in February, a 42.8 percent decrease from 2006. Yet median sale prices grew to $204,000 or 3.8 percent more than last year. New listings, though, swelled to 1,447 units, a 29.8 increase over 2006, while the number of available units ballooned to 5,524 or 34 percent more than 12 months ago.’
From a couple of days ago: ‘Increasingly, people’s dream homes of two or three years ago turn into nightmares because of mortgage payments they no longer can afford. ‘We used to get one or two (foreclosures) every couple of months,’ said Vicki Bardo, 2007 president of the Yuma Association of Realtors. ‘For some years, we didn’t have any at all.’
‘Pulling out a stack of back issues of The Sun, she noted that these days it’s common to find several trustee sales listed in the public notices section of the newspaper on any given day. For example, on Friday, there were 20 listed.’
‘We’re seeing a preponderance of them,’ Bardo said. ‘They’re in every price range. They’re new houses and old houses. They’re all over the county from San Luis to Wellton and everywhere in between.’
I know a lot has been going on…so I got a new post up today.
SoCalMtgGuy
http://www.housingbubblecasualty.com
Any chance of those jackasses at Lenox going belly up so I don’t have to hear more annoying radio ads about their “Biggest No-Brainer in the World” Loans ?
http://www.lenoxhomeloans.com/
I sure hope so
You guys complain about a lack of truth in lending and when someone does an accurate ad you crucify them! :):)
“Without making more land available, Southern Nevada will become more like Southern California”
Is someone digging an ocean out there that I don’t know about?
Yes, complete with a tunnel to Mexico.
> Yes, complete with a tunnel to Mexico.
You mean “Yes, complete with a tunnel FROM Mexico.”
Hmm.. I don’t know, the dollar’s dropping pretty fast. Pretty soon the Mexicans will be coming here to go shopping, and Americans will be sneaking across the border for work. 8 |
No, I think he got it right the first time, just give it a couple months. When it really set’s for these FB’s how screwed they really are, workin’ a taco stand in TJ or making roof tiles over their knee in Tecate will sound like a pretty damn good alternative to their current situation.
First, it was “they’re not making anymore land”. Now, in places with a seemingly endless supply, it’s “without making more land available”. Paying $500k per acre for scrub in a sh!thole like Vegas, in this environment no less, is as stupid as it gets. These deep pocketed developers deserve to lose their @ss.
Geeze, and I worked with a company selling crappy land in West Texas for $500/acre - a little more affordable for land that has virtually nothing to offer.
Yes, that would be Lex Luther’s plan.
Actually, water is their problem… they’ll need to start recycling it
“Smith said. ‘We have been talking about this for 10 years,”
yea, and your gonna be talking about it for 100 more…cause Vegas ain’t running out of land…
indeed, what a ridiculous comment from that Smith guy! Prices soaring due to limited land? WTF is this guy smoking? You know, I’m torn between humor and anger when I read these kinds of statements. I mean, aren’t these people embarrased to be making such lame comments?
Running out of land in Southern NV! ROTFLMAO.
Someone needs to speedbag that dudes nut-sack! LV inventories have just ripped past last years highs, and it ain’t even Spring yet. The only thing this dong has a shortage of is ignorant buyers. The comments below his make the observation that’s really key; all the friggin’ vacant homes.
And hey, Mr Smith, you may not have noticed, but even DL sold you down the river in recent comments. Go sell your crap elsewhere.
“Someone needs to speedbag that dudes nut-sack!”
priceless… LMAO
whoo. best laugh I’ve had all day!
Does make for a interesting visual.
How about an on the ground update on the Sedona market, Ben? What are you seeing?
I’m curious about Prescott, AZ if anyone has info.
Catherine is really familiar with Prescott. Maybe she’ll see this.
I own a lot in Sedona . Yavapai County just raised the value on my property by 70% in one year and I am the origional owner with no structure on it. I have appealed and waiting an outcome. The dirty politicians are trying a tax grab before the whole house of cards comes down.
multiply that construction number by 2 or 3 folks
the iliegelo factor-o
Statistics are useless……
Todd Snider has it right:
http://media.putfile.com/Todd-Snider–Statisticians-Blues-
OKAY, my mental estimate on Einhorn’s NEW losses was way off. But when do we find out he is actually excaped mental patient ray Finkle?
From Bloomberg:
Einhorn, 38, quit yesterday, Greenlight said today in a filing with the U.S. Securities and Exchange Commission that didn’t give a reason. The New York-based hedge fund holds a 6.3 percent stake in New Century, the filing said. Shares of the Irvine, California-based company have plunged almost 90 percent since Einhorn joined the board last March, handing Greenlight a loss of about $140 million on its stake during his tenure.
38 ? will he get SS ?
had to chuck that in
ha.
“38 ? will he get SS ?
had to chuck that in”
this Einhorn man not too bright… should have made them FIRE him! Then he could have qualified for Unemployment… Now what will he do for money?
LOL
Can you even imagine trying to manage that much money in this market with the expectations people have today? I’d be in a rubber room in a week. Of course when you’re paying yourself 2/20 or whatever they’re doing now, those expectations are somewhat justified.
“In one of the smallest auctions since the Southern Nevada Public Land Management Act was passed in 1998, only four parcels totaling 25 acres were sold at Wednesday’s BLM auction for nearly $12.5 million, or roughly $500,000 an acre.”
That sounds like a vote of no confidence from the market to the BLM auctioners. Maybe Nevada isn’t running out of land after all?
The only thing Las Vegas is running out of are greater fools.
and mortgage loans for the few GFs left.
No, the GF’s are still there, but they’re back in the casino’s where they can get comped for their stupidity.
“Without making more land available, Southern Nevada will become more like Southern California with its soaring prices because of limited land, said Las Vegas housing analyst Dennis Smith. Builders are having difficultly finding parcels of between 10 to 20 acres, and property owners aren’t cutting their prices, he said.”
I think if he gets to be an analyst someone should hire me as well.
I remember the Las Vegas becoming Manhattan quote after reading that. Also builders won’t have to wait long vast tracks of land will soon be available from banks that are gotten from prior builders whom went bankrupt.
Maroon Alert! Land is unavailable because it costs too much? So maybe a lower price will free up some land. Yathink?
The only thing we are running out of here in Vegas are greater fools.
This is going to be a bad bad year.
IIRC someone on this blog commented that 2007 was going to suck.
Yeah, it was the CEO of DRHorton
I think it was everyone one this blog.
I just can’t decide if it suck worse in ‘07, ‘08 or ‘09.
a silver lining ?
Governments, including schools and universities, lost 6,300 jobs
whoops, feds kept hiring
Is the Fed creating more jobs equivalent to printing money? do they really need those positions filled?
nope- it’s just printing money
try these guys http://www.cagw.org
“D.R. Horton, like its rivals, has cut the number of new homes it starts to build, but a large supply of existing homes is also forcing homebuilders to reduce prices or offer incentives.”
How about just reduce the prices and forget about the damn incentives. Keep the effin’ Home Depot gift card and drop the price damn it.
They are workin’ my nerves with the incentive crap.
BayQT~
Hi BayQT: Thanks for the Dublin report yesterday. With so many units still under construction here, I think those clowns still need to come alot further down in price. Your observations were about the same I have seen, maybe a bit higher in % drop. At least it’s a start! Someone told me that the SFH along the west side of Tassajara were selling at about 400K or a little less when built roughly six years ago. Up until recently they were high 7s and even into the 800K+. Since reversions tend to go beyond the mean, I’m thinking Dublin could wind up seeing 40-50% off the peak in 2005. Any thoughts on that?
And as for the incentives from builders? Yes, give me a break! Stop trying to falsify the market with crap “upgrades” and gifts. Lower the price! Maybe they give out Home Despot cards because they know the house is going to fall apart from day one???
Hey CA Guy: You’re welcome. Regarding the Tassajara builds, I knew an engineer (2004) at PeopleSoft (before the Oracle takeover) who bought a condo, pre-2004, for a price in the $300s, so I’m thinking 6 years is about right for the SFH @ $600k. Those same crapbox condos are in the $600s now. Sheesh! And there is a lot of building going on. For kicks and grins, take a look at the City of Dublin site. Select the purple tab (Economics), and then choose the New Developments link. There you will find a map and project list of everything going on in Dublin. It will blow your mind.
Back to the Tassajara builds…..I took a builder friend from Clearlake on a tour of the *new* 3 -level townhouses in ‘05. He shook his head at every step. So much jumped out at him as sub-standard, except of course for the GCT. LOL! Another observation was that, in his words, the square footage was mostly taken up in the stairways! What also irked me was that the rooms were so teeny tiny; the master bdrm was a joke. All you could get in there was a bed and 2 night tables. Forget space for a dresser, chest, maybe a TV stand ’cause there were no walls for them! The only wall was for the bed and night tables….another wall had the window and a little room on one side of it, but on that side was where (ta da!) the wall length closet was. And then, the fourth wall was the walkway/door way, and the entry to the master bath. I hope you can visualize the room….it was really stupid. Ugh! But I’ve seen so many new construction build exactly like this.
Suffice it to say, the folks who bought over there were not looking for quality, practicality, nor the best bang for their buck. Many were just looking for the next new thing. They got it alright, and a lot more than they bargained for.
I agree with you that Dublin is looking at a severe haircut, and to the misfortune of a lot of buyers who bought in the last 4 years.
BayQT~
“In September the BLM said it would allow the market to drive decisions on releasing land, and that it would not sell land when the real estate market is soft. The BLM canceled an auction for 2,200 acres in Henderson in December when developers were dropping their construction plans because of the soft market.”
This is outrageous. BLM says they would allow the market to drive decisions on releasing land. Then say they won’t sell into a soft market. They are NOT allowing the market to decide. Rather, they are artificially keeping land, and home prices high. Unbelievable!
Tortious, that land is held in the public trust. A true outrage would be selling into weakness and squandering the public fisc.
Subsidize sprawl in the desert? No thanks.
Oh please. If it were all owned by some large developer, you’d be screaming about people hoarding land. Keeping the land off the market simply encourages more sprawl by forcing people farther out from the city, where parcels are easier to obtain.
All of the land referred to in the article is under the Southern Nevada Land Management Act. It’s all in Clark County, and most of the area surrounding it is already urbanized. The county is a massive checkerboard of private and public lands. We’re talking about all sizes of parcels, which would have been developed long ago, except that they are held off the market by the BLM until they can extract the maximum possible price for the land.
It reduces the density of the city and creates artificial scarcity. It makes commutes longer and traffic worse. You’d think a New Yorker would get it.
No, it violates the basic theory of supply and demand. The land is worth less because the demand is gone. Under this theory, BLM can sit on the hundreds of square miles of vacant land until demand hits $1 million an acre or more. Why not hold out for $10 million an acre.
The pricing is based on bubble pricing, not a real demand. In Las Vegas, there is a significant imbalance between incomes and housing prices. BLM’s action artificially keeps the bubble in place.
I say we start setting aside land back East for “public trust”, national parks, so on and so forth? Why do snotty easterners think that our land should be only sold at a premium while they’ve willy nilly developed every area in their urbanized zones. I love urbanite NY’ers telling westerners how to manage the land out here.
Maybe they are saying that if you don’t manage your land it’ll end up looking like New Jersey without water.
Those who don’t learn from history are doomed to repeat it?
Remember, that’s our land. I want the BLM, if they’re gonna sell my land at all, to get top dollar for it. I’d prefer that they manage it for recreational use, but if they’re gonna sell, get the most they can. I’m sick of seeing BLM sell my land for pennies on the dollar to well-connected developers and extractive industries. Using public money and resources to subsidize private profit pisses me off.
If I want to write a check to D.R. Horton, I’ll buy a house from them.
–Shannon
But there will always be a higher “top dollar” down the road. If you assume that real estate always goes up in the long run (I know, famous last words), then it’s never the right time to sell, is it? You can always make more money in a year or two.
If you assume that RE fluctuates in value, then the BLM has to try to time the market for maximum profit.
Except that BLM controls the market. There’s no one else who can add new land to the supply in the market. They have every incentive to keep as much land off the market to ensure top dollar.
As for private developers and profits, well, they do the hard work of actually building something there. I suppose, though, that someone will always see any sale as a “giveaway” if the developer makes a profit of $1.
Finally, once the land is sold, it generates property tax revenues, forever. It generates nothing while BLM controls it.
(sorry if this posts twice)
But there will always be a higher “top dollar” down the road. If you assume that real estate always goes up in the long run (I know, famous last words), then it’s never the right time to sell, is it? You can always make more money in a year or two.
If you assume that RE fluctuates in value, then the BLM has to try to time the market for maximum profit.
Except that BLM controls the market. There’s no one else who can add new land to the supply in the market. They have every incentive to keep as much land off the market to ensure top dollar.
As for private developers and profits, well, they do the hard work of actually building something there. I suppose, though, that someone will always see any sale as a “giveaway” if the developer makes a profit of $1.
Finally, once the land is sold, it generates property tax revenues, forever. It generates nothing while BLM controls it.
BLM land is sold at public auctions every few months. They are, in theory, already getting top dollar for it. They ensure even higher prices, however, by limiting the supply of land available for sale.
Just to illustrate an earlier comment on a seperate thread. Here are two home for sale one is a bit smaller with a pool for 475 (been on and off the market for a year), the second is a slightly bigger home with no pool for 650K. What are people thinking?
http://www.realtor.com/FindHome/HomeListing.asp?snum=30&frm=byzip&lid=Enter+MLS+ID&pgnum=3&ss_aywr=&st=&mls=xmls&mnbed=0&js=on&mnsqft=0&fid=so&vtsort=&poe=realtor&mnprice=450000&ct=&zp=89052&mxprice=700000&typ=1&exft=0&exft=issty&exft=0&exft=0&mnbath=0&sid=082F94BD8FC1C&snumxlid=1075622725&lnksrc=00002
http://www.realtor.com/FindHome/HomeListing.asp?snum=163&frm=byzip&lid=Enter+MLS+ID&ss_aywr=&st=&mls=xmls&mnbed=0&js=on&mnsqft=0&fid=so&vtsort=&poe=realtor&mnprice=450000&ct=&zp=89052&mxprice=700000&typ=1&exft=0&exft=issty&exft=0&exft=0&mnbath=0&sid=082F94BD8FC1C&pgnum=17&snumxlid=1075942799&lnksrc=00002
Add to this the fact that you are in Henderson, the most soulless city imaginable. I give up.
http://www.ziprealty.com/maps/index.jsp?usage=search&cKey=74rbwvlk
ZipRealty has 1,010,946 active homes Nationwide
this number was 932,000 on feb 14th and around 957,000 this morning
Phoenix has hit an all time inventory high also. I just checked it and it is at 54700. It has been under 54K for about a week now.
Sounds like it must have been quite the topic at your bubble party, Golfer. (And this Tucsonan is truly jealous. Now WE are going to have a bubble party, just to perpetuate the endless Phoenix-Tucson rivalry.)
Hey, I’ll be in Tucson the 22nd thru 25th so if you are going to have one then please consider that time frame
It’s jumped to over 80,000 in the Chicago area. It was at 75,000 3 weeks ago.
Yes, the inventory dam is definately breaking. Record inventories no longer a prediction, but rather a reality. I think it’ll take a couple of months for the meaningful reductions to pick up steam. All the folks with their fingers crossed for the spring recovery won’t figure it out ’til then, so don’t look for the price drop right away. Until then, take heart that this inventory explosion means only one thing - PRICE DEFLATION.
Record inventories no longer a prediction, but rather a reality. I think it’ll take a couple of months for the meaningful reductions to pick up steam.
Agree. I don’t expect any meaningful price drops until Sep-Oct of this year. But in the months since I began my house search (and started reading this blog), I’ve experienced a shift in my desire to purchase a house. Now I’m comfortable with being a longterm renter. Not trying to call a bottom, but at this point I’m not willing to submit any serious offers this autumn.
“Eastern Yuma County has been described as a blank canvas.”
Gee, I wonder why it’s been a “blank canvas” for so long?
Um, lemme guess…
1. It gets REALLY hot there in the summertime. As in, highs above 110 are not uncommon.
2. Not much water.
3. Never had much of an economic base, other than irrigation-supported farming and military operations that need a lot of room (such as the Air Force bombing range).
“3. Never had much of an economic base, other than irrigation-supported farming and military operations that need a lot of room (such as the Air Force bombing range).”
Sounds like the next big “BOOM” town. Sorry…couldn’t help myself!!!
Somebody is trying to push me right over the edge with the Yuma comments.
YUMA ARIZONA!
Slowly I turned, step by step, inch by inch……..
ya but Yuma was always a great place for bad guys to get out of prison from in westerns… i.e. released from close approximation of Hades.
Looks like the NEW dump is starting in the closing 30 minutes…
It was up this AM. I guess one of the analyst commented that even if one or two not giving the waiver would put NEW in bankruptcy.
I am guess that moron Einhorn sold all his stock…
Astronomical NEW volume today.
It’ll be Interesting to watch what stocks get the “weekend hot potato” treatment tomorrow.
Over 89% of outstanding shares changed hands today (49.5 mil out of 55.4 mil). A 500% increase over 30 day average.
Remember, for every seller, there’s a buyer!
Anyone want to be some of my New Century stock? Real cheap. Best offer. Only 55 more minutes before Larry goldilocks Kuntlow begins his show on CNBC, I’m here in California and I am certain he will say New Century is a buy at these prices. “A story never told or understood I am sure.”
Larry is such an idiot. God I hate that guy. Why does CNBC keep him on ? Why not get someone that tells the truth about the stock market ?
Larry and his get America spew and “Greatest Story Never Told”. First of all, he is telling it every day. And secondly, just because the story is told doesn’t mean that stocks aren’t over priced and people way over leveraged ! How do you think the consumer carried the economy for the last 5 years ?
NEW 8K just filed:
“As a result of the Company’s current constrained funding capacity, the Company has elected to cease accepting loan applications from prospective borrowers effective immediately while the Company seeks to obtain additional funding capacity. The Company expects to resume accepting applications as soon as practicable, however, there can be no assurance that the Company will be able to resume accepting applications. “
“there can be no assurance that the Company will be able to resume accepting applications”
TIMBERRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR
No bankruptcy filing though, I guess.
Not yet…
[NEW] New Century Financial shares halted at $3.87 in late trading
4:25 PM ET, Mar 08, 2007 - 3 minutes ago
Yeehaw. Guess I’ll look at Pacer, probably not there yet.
Halted - pending news…
I see the idiots on the Yahoo board saying they want to buy the stock in their IRAs after it files bankruptcy. The financial illiteracy is scary.
http://www.nasdaqtrader.com/asp/THSearch.asp?Symbol=new
The PR says Einhorn is off the board. BFD. Who cares.
Trade Halt Code Description
T.1 Halt - News Pending
Trading is halted pending the release of material news.
Oops, they got money. Watch out if you’re short.
Im shorting NSM though. That looks good.
Pending news - WE ARE SCREWED. Brother can you spare a dime.
The money news was in the 8k filed earlier, IIRC…
Unless it’s some kind of DIP financing though, probably no bk right now. It would be weird to see a pr for the financing before the filing was announced.
Anyone see the irony here:
New Century Feels Crunch
By Mark DeCambre and Laurie Kulikowski
Staff Reporters
3/8/2007 4:36 PM EST
Click here for more stories by Mark DeCambre
1. Picking Apart Obama’s Stock Portfolio
2. Dykstra: Burnt Peabody
3. Ciena Near Big Verizon Win
4. Subprime Stew Bubbles
5. Cramer Picks Through Buffett’s Portfolio
CyberTrader
Zecco.com
Charles Schwab
Fidelity Investments
TD AMERITRADE
E*TRADE Financial
New Century (NEW - Cramer’s Take - Stockpickr - Rating) got $265 million in financing, calming rabid speculation on Wall Street that a bankruptcy filing was imminent.
But the company said in a regulatory filing it had stopped accepting loan applications as its lenders clamp down on the company’s borrowing. New Century said it “has only been able to fund a portion of its loans this week,” and “its capacity to fund new originations is substantially limited due to its lenders’ restrictions or refusals” to extend credit.
The Irvine, Calif., lender to homebuyers with poor credit histories said the new financing will be secured by New Century’s REIT mortgage loan portfolio and certain residual assets. It will use the proceeds to refinance existing obligations.
Tx - You are correct, traded has begun. I was incorrect. This is new financing.
Still too late. They are days away from a filing. They stated they will not accept anymore loans, what else are they going to do - sit around and look at each other all day?
Read the RM story. It’s unbelieveable.
Oh and don’t miss this one either.
http://www.thestreet.com/funds/followmoney/10342652.html
think about this
new financing will be secured by New Century’s REIT mortgage loan portfolio and certain residual assets. It will use the proceeds to refinance existing obligations.
The bubble is alive and well.
Don’t jump the gun, Crispy . . . it’s not clear to me that this is purely new financing.
They’re bordering on insolvency, blew their covenants, and miraculously have collateral laying around for $265MM in new financing? Please. This is shuffling the deck chairs/cutting in line for the life boats.
This is an existing lender seeking to improve their collateral position before the sh!t really hits the fan. (JMHO)
Yup, that’s what I was thinking too. Rearranging the deck chairs, readying the lifeboats, etc.
Economists warn FED about inflation.
From CNN Money
http://money.cnn.com/2007/03/08/news/economy/inflation.reut/index.htm?postversion=2007030815
Economists warn Fed on inflation expectations
To judge if their policies are working, central banks often rely too much on the price rises people expect: paper.
March 8 2007: 3:34 PM EST
WASHINGTON (Reuters) — Several economists warn the Federal Reserve and other central banks in a paper released Thursday against relying too much on inflation expectations to assess whether their policies are indeed keeping prices stable.
“Our data findings serve as something of a cautionary note for policy-makers against excessive reliance on measures of inflation expectations as indicators of policy effectiveness,” wrote the economists in a paper on the inflation process to be presented at a conference Friday.
Some policy-makers focus intensively on inflation expectations as the primary determinant of inflation itself, the economists said.
Bernanke: Globalization may boost U.S. inflation
“Our results suggest that this practice is misguided,” the study’s authors wrote.
The authors of the paper, “Understanding the Evolving Inflation Process,” are Stephen Cecchetti, Peter Hooper, Bruce Kasman, Kermit Schoenholtz, and Mark Watson.
Fed officials often cite the importance of keeping inflation expectations low as way to keep inflation itself under control. If inflation remains too high for too long, businesses and consumers begin to make future plans for spending and investing on the expectation that prices will rise by a certain amount, leading to inflationary pressures.
In the current situation, Fed officials are worried about higher-than-desirable core inflation levels, but cite low inflation expectations as grounds for optimism that core inflation will recede.
“A further gradual decline [in core inflation] was seen as the most likely outcome, fostered in part by the continued stability of inflation expectations,” minutes of the Fed’s Jan. 30-31 meeting said.
The study says none of the various measures of inflation expectations appear to have been able to forecast U.S. core inflation in recent years.
“Some policy-makers focus intensively on inflation expectations as the primary determinant of inflation itself, the economists said.”
Well that’s a no brainer. The FED’s job is to provide as much inflation as resaonably possible. They don’t care about real inflation, they just need to know how much new money they can pump out without being blamed for the ill effects.
In a democracy you only have to fool most of the people most of the time to be successful.
LOL. We’re talking about Vegas, here. There’s hundreds of miles of equally crappy land stretching off into the distance in every direction as far as the eye can see. What we have here isn’t a supply problem at all. This is an availability problem. The two are TOTALLY different. A supply problem in land is insurmountable and virtually guarantees high prices into the distant future. A beaurocratic availability problem is totally and instantaneously surmountable.
Anyone bidding on expensive real estate who’s value is being maintained only because of the whims of the current city council is destined to lose money.
RE: NEW’s Margin Calls and 710 million dollar loan repurchase.
One of the Company’s lenders has extended to the Company $265 million in financing secured by the Company’s REIT mortgage loan portfolio and certain residual assets. The net proceeds from the financing will be used to refinance and/or satisfy some of the Company’s existing obligations. This lender has also provided financing to the Company to refinance the remaining balance of approximately $710 million in mortgage loans currently financed through another lending facility. This refinancing was undertaken in response to that lender’s notice to the Company exercising its rights to effect a repurchase by the Company of the loans and other assets it had financed for the Company.
Furthermore, the Company is in discussions with lenders and other third parties regarding a refinancing and other alternatives to obtain additional liquidity. No assurance can be given that any of these discussions will be successful.
The Company has not yet obtained waivers of the net income covenant from its remaining five financing arrangements since filing the Form 12b-25 on March 2, 2007. In addition, the Company has received an aggregate of approximately $150 million of margin calls, approximately $80 million of which has been satisfied. The Company has approximately $70 million in outstanding margin calls from five lenders.
Clearly land prices have outpaced cost increases in labor and materials.
High land prices tend to make builders build bigger and higher end homes, lest they don’t make enough on each lot.
It’s spreading!
“Bidders shy away from auction of trust land
Tatiana Hensley
The Arizona Republic
Mar. 8, 2007 12:00 AM
FOUNTAIN HILLS - The Arizona State Land Department still has no registered bidders for next Thursday’s planned auction of nearly two square miles of state trust land recently annexed into Fountain Hills.”
Link: http://www.azcentral.com/community/scottsdale/articles/0308sr-auction0308Z8.html